Retinol (vitamin A), and its active derivative retinoic acid (RA), regulate many aspects of cell growth and differentiation, and thereby play an important role in vertebrate morphogenesis. In mammals, retinoids are well known to be potent teratogens in both deficiency and excess, with the developing nervous system being a primary target. Exposure to high doses of retinoids during early stages of development interferes with the proliferation, migration and differentiation of cells derived from the neural epithelium, resulting in severe craniofacial, brain and spinal cord deformities. Recent data suggests that some of these defects may be due to the ability of RA to alter the expression of class I homeobox genes (Simeone et al., 1991). These gene clusters are important in specifying positional information along the anterior- posterior axis of the developing embryo. Analysis of the expression of the Hox genes in embryonal carcinoma cells indicates that they are temporally and spatially regulated, and differentially activated by RA according to their position within the cluster. The mechanism(s) by which RA exerts its effect on these genes is not well understood, but clearly involves a number of cytoplasmic and nuclear binding proteins. Several of these cellular retinoic acid binding proteins, CRABPI and II, are of particular interest since they are found in embryonic tissues containing high levels of RA, have been implicated as mediators of RA- induced differentiation in a number of cell lines, and may play a key role in modulating the amount of RA available to the nuclear receptors. The proposed investigation is aimed at defining the role of the CRABPs in vertebrate development, in particular in the regulation of Hox gene expression. The goal of these studies is to functionally delete the CRABPs in RA-responsive cell lines through gene targeting technologies. These lines will then be analyzed for altered Hox gene expression, and examined for their ability to undergo differentiation following RA treatment. To study the role of the CRABPs in embryogenesis, the CRABP cells lines will be used to generate chimeric mice which would be null mutants for CRABP expression. Analysis of the development of these mice will establish if CRABPs are essential for embryogenesis and function in the regulation of Hox gene expression.